China, US keep top positions on EY's renewables index

Collocated solar and wind parks. Photo Credit: Istock

November 7 (Renewables Now) - There is little movement in the top 10 of Ernst & Young's (EY) latest Renewable energy country attractiveness index (RECAI) as ongoing geopolitical instability is causing caution among leading renewable energy markets, the firm said today.

China and the US hold on to their number one and two positions in the 40-strong ranking, while the UK slips down to eighth from seventh place amid concerns over Brexit. In the UK, worries about Brexit's impact on power exports to the EU and the price of imported equipment have seen renewables investment fall 46% year-on-year in the third quarter.

India, meanwhile, moved up one position, compared to the previous edition of the index in May, to number three, but EY said progress towards 100 GW solar target has been impeded recently by trade uncertainty, including a 25% tariff on solar cell imports.

"An uncertain political climate – particularly the continuing trade disputes between the US and China, among others – compounded by the increasing scarcity of subsidies, presents a challenging backdrop to the maturity of the renewables sector," commented Ben Warren, EY global power and utilities corporate finance leader and RECAI chief editor.

EY also said that less mature markets are making bolder moves. Argentina, for instance, makes its first entry into the top 10. The country's government has announced the third round of its RenovAr auction programme, which along with the first PPP tender for transmission shows political support for renewables, it commented.

Egypt climbs five places to 15 as its total wind capacity is expected to expand by 3.3 GW by 2027.

Sweden, on the other hand, is a big faller, moving to 32nd from from 22nd position, given the decline in future prices in power and green certificates due to a large supply of onshore wind.

Warren further commented that oversupply will boost the price competitiveness of renewables in the short- to medium-term, and could also lead to some consolidation upstream. "In the longer-term, increasing demand for power from the mobility and heating sectors provides something other than trade disputes for policymakers to focus on," he added.